New York Laws
Article 26 - Miscellaneous
399-PP - Telemarketing and Consumer Fraud and Abuse Prevention Act.

(1) the applicant's name, address and telephone number;
(2) each business name under which the applicant engages in or intends
to engage in telemarketing, if such name is different than the
applicant's;
(3) the complete street address and primary telephone number of each
location, designating the principal location, from which the applicant
engages in or intends to engage in telemarketing, including each
location at which mail will be received by or on behalf of the
applicant, and identifying any such location that is a post office box
or mail drop;
(4) the name, address and telephone number of each principal of the
business;
(5) whether the applicant or any principal thereof has been convicted
or plead guilty to or is being prosecuted by indictment or information
for racketeering, violations of securities laws, or a theft offense of
any state, or the United States;
(6) whether any injunction or judgment has been entered into against
the applicant or any principal, or such applicant or principal has
entered into a settlement agreement, assurance of discontinuance,
consent decree or any similar instrument in any civil action involving
theft, racketeering, embezzlement, conversion, misappropriation of
property, fraud, or deceptive, unfair, illegal or unconscionable trade
practices, and whether any civil action involving such practices is
currently pending, to the extent not inconsistent with any existing
court orders; and
(7) whether the license to engage in any business, trade or profession
of the applicant or any principal thereof has been refused, suspended or
revoked in any jurisdiction.
d. Upon receipt of the completed application for registration and
required fee, and unless such certificate of registration has been
denied as provided in subdivision five of this section, the secretary
shall issue and deliver to the applicant a certificate in such form and
manner as the secretary shall prescribe, but which must set forth the
applicant's name, business address, and the effective term of the
registration. A registration certificate issued or renewed under the
provisions of this section shall entitle a person to act as a registered
telemarketer for a period of two years from the effective date of the
registration.
e. Any registration granted under this section may be renewed by the
secretary upon application by the holder thereof, in such form as the
secretary may prescribe. The secretary shall have the authority to
assign staggered expiration dates for licenses at the time of renewal.
If the assigned date results in a term that exceeds two years, the
applicant shall pay an additional pro-rata adjustment together with the
fee prescribed in paragraph f of this subdivision.
f. Each application for a certificate of registration shall be
accompanied by a fee of five hundred dollars, which shall not be
refundable.
g. The fees collected pursuant to this subdivision shall be deposited
to the credit of the business and licensing services account established
pursuant to the provisions of section ninety-seven-y of the state
finance law.
h. Any person holding a certificate of registration shall be required
to provide notice of any change in the information required of
applicants by this section, in such form and manner, and within such
time period as the secretary shall prescribe.
i. No person required to be registered under this subdivision shall be
entitled to enforce any agreement or seek any consideration or any other
payment for goods and services offered through telemarketing unless such
person is in compliance with this subdivision and subdivision four of
this section.
j. The secretary shall prescribe rules and regulations to administer
this subdivision and subdivision four of this section.
4. Bonding of telemarketers. a. Any applicant shall, at the time of
any original application for a certificate of registration, file with
the secretary, in the form and amount as prescribed in this subdivision
and satisfactory to the secretary:
(1) A bond with a corporate surety, from a company authorized to do
business in this state; or
(2) An irrevocable letter of credit or a certificate of deposit from a
New York state or federally chartered bank, trust company, savings bank
or savings and loan association qualified to do business in New York
state and insured by the federal deposit insurance corporation.
b. Such bond, letter of credit, or certificate of deposit shall be
maintained for three years from the date the telemarketer ceases
telemarketing, or three years from the date the certificate of
registration terminates, whichever is earlier.
c. The principal sum of the bond, letter of credit, or certificate of
deposit shall be twenty-five thousand dollars, which shall be maintained
until the period specified in paragraph b of this subdivision, subject
to paragraph g of this subdivision.
d. The bond, letter of credit or certificate of deposit shall be
payable in favor of the people of the state of New York for the benefit

of any customer injured as a result of a violation of this section,
pursuant to a determination of any court of competent jurisdiction
pursuant to this section, or article ten-B of the personal property law.
e. The aggregate liability of the surety upon the bond or the banking
organization upon the letter of credit or certificate of deposit to all
persons for all breaches of the conditions of the bond shall in no event
exceed the amount of the bond, letter of credit or certificate of
deposit.
f. The bond, letter of credit or certificate of deposit shall not be
canceled, revoked, diminished or terminated except after notice to, and
with the consent of, the secretary at least forty-five days in advance
of such cancellation, revocation, or termination. Unless the bond is
replaced by another bond, letter of credit or certificate of deposit in
conformity with this subdivision prior to the expiration of the
forty-five day period, the registration of the telemarketer shall be
treated as terminated as of the cancellation, revocation or termination
of the bond.
g. The registration of the telemarketer shall be treated as terminated
as of the date the amount of the bond, letter of credit or certificate
of deposit falls below the amount required by this subdivision.
h. Any change in ownership of a telemarketer shall not release, cancel
or terminate liability under this subdivision under any bond, letter of
credit, or certificate of deposit filed for any telemarketer as to any
customer who was injured as a result of a violation of this section or
article ten-B of the personal property law while such bond, letter of
credit or certificate of deposit was in effect unless such transferee,
purchaser, successor or assignee of such telemarketer obtains a bond,
letter of credit or certificate of deposit under this subdivision for
the benefit of such customer. Nothing in this paragraph shall be
construed to authorize any telemarketer to cancel any bond, letter of
credit, or certificate of deposit where such cancellation is not
otherwise authorized by this subdivision.
5. Refusal to issue, suspension, and revocation of registration. a.
The secretary, or any person deputized or so designated by him or her
may deny the application of any person for a certificate of
registration, refuse to issue a renewal thereof, suspend or revoke such
certificate or in lieu thereof assess a fine not to exceed one thousand
dollars per violation, if he or she determines that such applicant, or
any of its principals:
(1) has made a material false statement or omitted a material fact in
connection with an application under this section;
(2) was the former holder of a certificate of registration issued
hereunder which the secretary revoked, suspended, or refused to renew;
(3) has failed to furnish satisfactory evidence of good character,
reputation and fitness;
(4) with respect to the applicant, is not the true owner of the
telemarketer, except in the case of a franchise;
(5) is in violation of or has violated any of the following statutes
and the regulations thereunder, as such statutes and regulations may
from time to time be amended:
(a) this section;
(b) article ten-B of the personal property law;
(c) the act of congress entitled the "telemarketing and consumer fraud
and abuse prevention act" (P.L. 103-297);
(6) has been convicted or plead guilty to or is being prosecuted by
indictment or information for racketeering, violations of securities
laws, or a theft offense of this state, or the United States;
(7) has had any injunction or judgment entered against him or her in
any civil action, or such applicant or principal has entered into a
settlement agreement, assurance of discontinuance, consent decree or any
similar instrument involving theft, racketeering, embezzlement,
conversion, misappropriation of property, fraud or deceptive, unfair,
illegal or unconscionable trade practices;
(8) has had a license or registration to engage in any business,
occupation or profession suspended or revoked in any jurisdiction which
may impact upon the applicant's fitness for registration under this
section; or
(9) has committed, or is committing deceptive, unfair, illegal or
unconscionable trade practices in violation of the laws of this or any
other state or the United States.
b. Any proceeding conducted pursuant to paragraph a of this
subdivision shall be subject to the state administrative procedure act.
6. Deceptive telemarketing acts and practices. a. It shall be unlawful
for any telemarketer to directly or indirectly engage in the following
conduct:
(1) fail to furnish a copy of the certificate of registration at the
request of any interested party;
(2) present or attempt to present, as their own, the registration
certificate of another;
(3) give false or misleading information;
(4) misrepresent himself or herself to be registered;
(5) use or attempt to use a registration certificate which has been
revoked, suspended or is otherwise not valid;
(6) advertise telemarketing services without having a valid
certificate of registration under this section;
(7) represent in any manner that his or her registration constitutes
approval or endorsement of any governmental agency;
(8) assist or support any person when the telemarketer or any
identified employee knew or should have known that the person was
engaged in an act or practice in violation of this section or article
ten-B of the personal property law;
(9) request a fee in advance to remove adverse information or modify
adverse information to improve a person's credit history or credit
record;
(10) except for an attorney engaged in the practice of law, request or
receive payment in advance from a person to recover or otherwise aid in
the return of money or any other item lost by the customer in a prior
telemarketing transaction;
(11) obtain or submit for payment a check, draft, or other form of
negotiable paper drawn on a person's checking, savings, share, or
similar account, without that person's express written authorization;
(12) procure the services of any professional delivery, courier or
other pickup service to obtain receipt or possession of a customer's
payment, unless the goods or services are delivered with the reasonable
opportunity to inspect before any payment is collected; or
(13) misrepresent, directly or by implication, that a premium is a
prize.
b. Telemarketers shall provide all of the following information, in a
clear and coherent manner using words with common and everyday meanings,
when making a telemarketing call:
(1) at the beginning of the call and prior to any request by the
caller of the customer to release or disclose any of the customer's
personal or financial information, including but not limited, to the
customer's name, address, credit card, checking account or other
financial account number or information:
(a) that the purpose of the telephone call is to offer goods or
services for which a fee will be charged or to provide an investment
opportunity, whichever is the case;
(b) the telemarketer's name and the person on whose behalf the
solicitation is being made if other than the telemarketer;
(c) the identity of the goods or services for which a fee will be
charged; and
(d) whether the call is being recorded.
(2) the cost of the goods or services that are the subject of the
call.
(3) in any prize promotion, the odds of being able to receive the
prize, and if the odds are not calculable in advance, the factors used
in calculating the odds; that no purchase or payment is required to win
a prize or to participate in a prize promotion; and the no purchase
o
payment method of participating in the prize promotion with either
instructions on how to participate or an address or local or toll-free
telephone number to which customers may write or call for information on
how to participate; and all material costs or conditions to receive or
redeem a prize that is the subject of the prize promotion.
7. Abusive telemarketing acts or practices. It shall be unlawful for
any telemarketer to:
a. threaten, intimidate or use profane or obscene language;
b. engage in conduct or behavior a reasonable person would deem to be
abusive or harassing;
c. initiate a telemarketing call to a person, when that person has
stated previously that he or she does not wish to receive solicitation
calls from that telemarketer provided, however that nothing in this
section shall be construed to prohibit a telemarketer from telemarketing
goods, services or investment opportunities to any customer of any
affiliate, subsidiary or parent of such telemarketer;
d. engage in telemarketing to a person's residence at any time other
than between 8:00 A.M. and 9:00 P.M. local time, at the called person's
location; or
e. make a false, deceptive or misleading statement in regard to the
requirements of subdivision six of this section to a customer, or to
engage in any deceptive or unfair act or practice in association with
telemarketing.
f. knowingly make an unsolicited telemarketing sales call to any
person in a county, city, town or village under a declared state of
emergency or disaster emergency as described in sections twenty-four or
twenty-eight of the executive law.
7-a. Unlawful transmission of certain caller identification
information. It shall be unlawful for any telemarketer or seller to
knowingly cause any caller identification service to transmit
misleading, inaccurate, or false caller identification information,
provided that it shall not be a violation to substitute (for the name
and phone number used in, or billed for, making the call) the name or
telephone number of the person or seller on behalf of which a
telemarketing call is placed.
8. Recordkeeping requirements. a. All telemarketers shall keep for a
period of twenty-four months from the date the record is produced
records of all financial transactions, written notices, disclosures and
acknowledgments, including but not limited to:
(1) records of calls resulting in a promise by the customer to pay or
otherwise exchange consideration for goods and services, including but
not limited to the name and last known address of each customer, the
goods or services selected, the date such goods were shipped or provided
and the quantity provided, the amount charged by the company for the

goods or services provided (including all other related fees or charges
of any kind, including shipping and handling fees), and the amount
actually paid by the customer for the goods and services provided;
(2) the name and last known address of each prize recipient and the
prize awarded having a value of twenty-five dollars or more; and
(3) the name, any fictitious name used, the last known home address
and telephone number, and the job title for all current and former
employees directly involved in telephone sales; provided, however, that
if the telemarketer permits fictitious names to be used by employees,
each fictitious name must be traceable to only one specific employee.
b. A telemarketer may keep the records required by paragraph a of this
subdivision in any form, and in the manner, format, or place as they
keep such records in the ordinary course of business.
c. In the event of any dissolution or termination of the
telemarketer's business, a representative of the telemarketer shall
maintain all records as required under this subdivision, which shall be
the person required to maintain such records in the event of dissolution
or termination under rules and regulations issued under the act of
congress entitled the "telemarketing and consumer fraud and abuse
prevention act" (P.L. 103-297), or any person designated by the
telemarketer. In the event of any sale, assignment or other change of
ownership of the telemarketer's business, the successor or assignee
shall maintain all records required by this subdivision. In any case in
which this paragraph applies, the telemarketer shall provide notice to
the secretary, in the form and manner designated by the secretary of the
disposition of such records within thirty days of the dissolution,
termination, sale, assignment or change of ownership.
9. Waiver. Any waiver of the provisions of this section by any
customer shall be unenforceable and void.
10. Exemptions. a. The following persons shall be exempt from the
registration and bonding requirements set forth in subdivisions three
and four of this section:
(1) the state, municipalities of the state, or any department or
division of the state or such municipalities;
(2) the United States or any of its departments, agencies or
divisions;
(3) colleges, universities and other institutions authorized by the
regents of the university of the state of New York or comparable body in
any other state or jurisdiction, to grant degrees, including licensed
private schools and any registered business schools regulated by article
one hundred one of the education law;
(4) a person, which has been operating for at least three years a
retail business establishment in this state under the same name as that
used in connection with telemarketing, and both of the following occur
on a continuing basis:
(a) Either products are displayed and offered for sale or services are
offered for sale and provided at the business establishment; and
(b) A majority of the person's business involves buyers' obtaining
such products or services at the person's location;
(5) any not-for-profit corporation as defined in section one hundred
two of the not-for-profit corporation law and charitable organizations.
b. The following acts or practices are exempt from the requirements of
this section:
(1) telephone calls made by a telemarketer, collection agency or
attorney engaged in the practice of law for the exclusive purpose of
collecting a legal debt owed, in accordance with the applicable
provisions of the Federal Fair Debt Collection Practices Act (15 U.S.C.
§1692 et. seq.);
(2) telephone calls in which the sale, lease or other agreement for
goods or services is not completed, and payment or authorization of
payment is not required, until after a face-to-face sales presentation
by a telemarketer, or a meeting between a telemarketer and customer;
(3) telephone calls that are received by a telemarketer initiated by a
customer that are not the result of any solicitation by such
telemarketer; and
(4) telephone calls between a telemarketer and any for-profit
business, except calls involving the retail sale of nondurable office or
cleaning supplies.
c. The following acts or practices are exempt from the requirements of
paragraph b of subdivision six of this section.
(1) telephone calls pertaining to a renewal or continuation of an
existing or prior contractual relationship or the continuation of an
established business relationship between a customer and any
telemarketer, provided that the telemarketer discloses any material
changes in the terms and conditions of the prior contract, except for
calls made by a telemarketer in which the telemarketer or any of its
principals has previously engaged in any act or practice described in
subparagraphs one, two, five, six, seven and eight of paragraph a of
subdivision five of this section; and
(2) unsolicited telephone calls made by the telemarketer for the
purpose of overall efforts to develop new business that include other
methods and techniques intended to identify and communicate with
potential customers provided however that for all transactions which are
incidental to the call and result in the exchange of goods and services
the telemarketer shall disclose the following information:
(a) the telemarketer's name and the person on whose behalf the
solicitation is being made if other than the telemarketer;
(b) the identity of the goods or services for which a fee will be
charged; and
(c) the cost of the goods or services that are the subject of the
call.
10-a. The following persons are exempt from the fee and bonding
requirements set forth in paragraph f of subdivision three and
subdivision four of this section: A person engaged in a business or
occupation which is licensed, registered, chartered, certified or
incorporated with or by any state or federal agency. Provided, however,
any person not licensed, registered, chartered, certified or
incorporated with any New York state or federal agency, shall submit
evidence to the secretary of state, in a form and manner to be
prescribed by the secretary, of any license, registration, charter,
certification or incorporation issued by an agency or governmental
entity in this or any other state.
11. Enforcement. a. Every violation of this section shall be deemed a
deceptive act and practice subject to enforcement under article
twenty-two-A of this chapter. In addition, the district attorney, county
attorney, and the corporation counsel shall have concurrent authority to
seek the relief in paragraph b of this subdivision, and all civil
penalties obtained in any such action shall be retained by the
municipality or county.
b. In every case where the court shall determine that a violation of
this section has occurred, it may impose a civil penalty of not less
than one thousand dollars nor more than two thousand dollars for each
violation. Such penalty shall be in addition to the denial of
registration or renewal, suspension of registration or revocation of
registration or assessment of a fine authorized by subdivision five of
this section.

c. Any person who contracts with a telemarketer for telemarketing
services and has actual knowledge that the telemarketer is acting in
violation of this section shall be deemed to be in violation of this
section, unless such person takes reasonable measures to prevent and
correct any conduct that violates this section.
d. Nothing in this section shall be construed to restrict any right
which any person may have under any other statute or the common law.
12. Criminal penalties. Any person who is convicted of knowingly
violating paragraph a or b of subdivision three of this section, or
subparagraph two, three, four or five of paragraph a of subdivision six
of this section shall be guilty of a class B misdemeanor. Any person who
is convicted of knowingly violating subparagraph eleven or twelve of
paragraph a of subdivision six of this section shall be guilty of a
class A misdemeanor.
13. Separability clause; construction. If any part or provision of
this section or the application thereof to any person or circumstances
be adjudged invalid by any court of competent jurisdiction, such
judgment shall be confined in its operations to the part, provision or
application directly involved in the controversy in which such judgment
shall have been rendered and shall not affect or impair the validity of
the remainder of this section or the application thereof to other
persons or circumstances.

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